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Words I like: "A building that can't get financed is a building that can't hold value."
The “Real” Real Estate Minute: Your Condo's Financing Future Just Changed
Most condo owners think value comes from upgrades, location, and timing. Wrong. Value comes from whether a buyer can get a loan to buy it. And that just got harder.
On March 18, Fannie Mae and Freddie Mac made rule changes that will reshape condo financing over the next 12 months. I'm not being dramatic (I just lived it). Listed a condo in Roswell, had strong interest, willing buyers, offers ready. But the complex had fallen off the approved list. Those buyers couldn't close. We sat on the market with zero control over the roadblock.
Here's what's changing - The Condo Financing Trifecta:
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Limited Review is dead. Starting August 3, 2026, the shortcut that let buyers skip a deep dive into HOA finances is gone. EVERY condo loan gets a Full Review now: budgets, insurance, reserves, deferred maintenance. All of it.
- Reserve minimums jump from 10% to 15%. Effective January 4, 2027, your HOA must transfer at least 15% of its annual budget into reserves to stay "warrantable." Fall short and conventional lenders walk away.
- Baseline reserve studies are out. As of August 3, 2026, associations must follow the highest recommended funding level in a study completed within the last 36 months. Bare-minimum approach is over.
Simply put: drop below 15%, and buyers lose conventional financing. They're stuck with portfolio loans which bring higher rates, bigger down payments, fewer lenders. Buyer pool shrinks. Values follow.
One note: these changes apply to conventional loans only. FHA still uses a 10% reserve threshold, so a building can be FHA-eligible but fail the new Fannie/Freddie standards.
What you can do right now:
- Ask your HOA: "What percentage of our budget currently goes to reserves?"
- Ask your board: "Do we have a plan to hit 15% before January 2027?"
- If you're thinking of selling in the next few years, confirm your building is warrantable NOW - not after you've listed.
Buildings that prepare keep their buyer pools. Buildings that don't will learn why financing drives value, not kitchens, not countertops. Financing.
As promised, money in under a minute.
Are you on a condo board wondering how to get ahead of this? Or thinking about selling and want to know where your building stands? Reply to this email. We will walk you through it.
Thanks for reading,
Jake
678- 467- 4618
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